After SCOTUS Decision, Next Step For PA Sports Betting Is Regulations

By Grant LucasMay 15, 2018

At long last, the game is afoot for legalized sports betting.

But when that game tips off in Pennsylvania is still up in the air.

In a landmark decision handed down Monday in Murphy vs. NCAA, the US Supreme Court lifted the Professional and Amateur Sports Protection Act (PASPA) of 1992. The majority of the nine-member court ruled that PASPA, which federally prohibited sports wagering, was unconstitutional. The high court ruled that individual states should be allowed to legalize and regulate sports betting at their own discretion.

With legislation already in place, Pennsylvania is on the verge of doing just that.

Opinion of SCOTUS

The case in question dated back nearly seven years. New Jersey spent more than $8 million in legal fees throughout that time. Additionally, it passed several bills to legalize sports betting. Yet each step of the way professional sports leagues and the NCAA filed legal challenges.

That is, until 2016, when New Jersey appealed to SCOTUS. The court heard oral arguments in December 2017. And on Monday, the high court announced its decision.

The idea behind PASPA was that a ban on sports betting would alleviate concerns that those involved in sporting events could be bribed to influence single-game results. In his 31-page opinion, however, Justice Samuel Alito, writing for the majority, noted that “Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”

The US Constitution, Alito wrote, does not empower Congress to issue orders to state governments. The result was a striking down of PASPA. Now sports betting can be legalized on a state-by-state basis.

What it means for Pennsylvania

Six states are at the forefront of being the first to legalize sports betting. New Jersey will likely be first. Pennsylvania could be next in line. One research firm estimated that 32 states could be offering sports betting within five years.

Pennsylvania got ahead of the game late in 2017 as the state legalized sports betting as part of its comprehensive gaming expansion. Monday’s SCOTUS ruling activates that part of the law. Now Pennsylvanians can wager on professional and collegiate events in person, online, or on a mobile device. But first the state needs to greenlight a regulatory framework.

The Pennsylvania Gaming Control Board (PGCB) will oversee sports betting. The group is already reviewing the SCOTUS opinion. According to spokesman Doug Harbach, however “we cannot provide a timetable on the completion and approval of these regulations or the launch of sports wagering in Pennsylvania.”

As a reference, though, consider that when table games were approved to be implemented within the state’s slots-only casinos in 2010, it took six months for the games to be rolled out.

Many casinos in the state have expressed a desire to get the industry rolling as soon as possible.

Impact on Pennsylvania

Harbach also said that the state legislature perceived sports betting as a “key element of overall gaming expansion.” Pennsylvania lawmakers leaped at the opportunity to legalize sports betting. And it could certainly boost the state’s economy.

“We have been eagerly anticipating and preparing for this decision,” said Greg Carlin, CEO of Rush Street Gaming, which owns the both Rivers Casino and SugarHouse Casino.

“It’s exciting news for the consumer, the industry and the states. In addition to providing sports enthusiasts with a better, safer environment, today’s Supreme Court decision will redirect revenue previously lost to the black market and instead generate much-needed tax revenue at state and local levels.”

Previously, Nevada monopolized single-game sports betting. Last year, sports betting revenue in the state was a record $248.8 million out of $4.87 billion wagered.

Once regulations are finalized, the PGCB can begin accepting applications for operators. The initial applicants will be the 13 existing Pennsylvania casino licensees. Those who want a license will pay $10 million up front to provide sports betting. Then it will pay a state tax rate of 34 percent of revenue. Additionally, casinos will pay a .25 percent fee on handle and a two percent tax that serves as a local revenue share.

So, in the near future, expect to be able to place bets at Rivers Casino near Pittsburgh, or at SugarHouse, Parx, and Harrah’s in Philadelphia. But for now, patience is key for sports bettors as a regulatory framework is developed.